The world is undergoing an intensive process of urbanisation. In 2008, for the first time in history, over half of the world's population was living in urban and peri-urban areas. It is estimated that this number will increase to 5 billion by 2030 with most of this growth occurring on the edges of mega-cities. Smaller cities are also undergoing large transformations. Urbanisation can bring opportunities for people to improve their standard of living and access to education and other services but it can also bring and concentrate poverty in developing countries where most of this urban growth is occurring. Increased urbanisation presents planners and policy makers with many challenges, foremost among them, competition for land and water resources with other sectors such as agriculture. Critical to our capacity to develop a sound urban transformation policy is our ability to integrate science to support the formulation of sustainable planning strategies. Increasing competition for water in many regions of the world provides an impetus for increasing use of water saving and replacement techniques, such as water reuse and recycling and urban runoff harvest. This new paradigm requires an improved capability for integrated modelling approaches to analyse the whole-of-water-ycle. Such an approach involves the integration of the various sub-systems-Catchment (surface-groundwater), water supply systems, wastewater, water allocation, internal recycling, decentralised treatment and storm water harvesting. Adding to this system complexity is the need to consider water quality as a constraining factor when using a fit-for-purpose approach to integrated urban water management (IUWM). This paper focuses on the challenges and opportunities involved in modelling the urban/peri-urban water cycle for planning of urban and peri-urban systems, including spatial and temporal scale and integration of hydrologic, water allocation with differential water quality across catchment and political divisions. Case studies are used to illustrate the use of integrated water modelling to inform a scenario planning approach to integrated water resource management in an urban/peri-urban context. In this analysis, two main constraints to effective modelling are identified-Lack of model integration and lack of data in the appropriate time and spatial scale often stemming from the lack of a robust data monitoring program of the entire water cycle. A framework for integration of water system modelling with economic modelling is presented.